The question has been making its rounds on social media asking if the U.S. should sell off 20% of the U.S. gold reserves to pay off the debt?

The answer is no.

If I did the math correctly, selling 20% of U.S. gold stocks, 1476 tonnes, at the current price of $2345/oz equals about $462 billion.  A tonne is 2202 pounds. If you are referring to the U.S. debt of $34 trillion then money from the gold sale would only amount to a little more 1% of the total debt.

On a different note, the U.S. used to have more than 18,144 tonnes of gold or $1.5 trillion in today’s dollars. Due to the consequences of 1944 Brenton Woods agreement and the failure of the Kennedy/Johnson/Nixon administrations to stop the ability of foreigners to change dollars into gold, the gold supply was reduced to 7379 tonnes.

Changing the subject again, the Chinese have been on a gold buying spree since 2023. The People’s Bank of China bought 735 tonnes of gold in 2023 and their private sector bought an additional 1411 tonnes. In January of this year alone China has purchased 228 tonnes. All this buying has helped to drive up the price of gold by about 27% since January of 2023.

A better question to explore is why are the Chinese buying so much gold?